Owning a construction business can be a self-rewarding experience and opportunity for financial independence; however, it’s also a very competitive marketplace. Venturing into a siding contractor business is no different, and it can be a dog-eat-dog world, but for those individuals who have the right attitude and competitive edge? They can find great success in this industry.
The Key Components
When it comes to starting a siding business, there are key components to starting a successful siding business. One of the first things you should consider is your brand and designing a logo that can be incorporated into your business cards, letterheads, workforce apparel, yard signs, and graphic designs for your company vehicles. The more professional your business appears, the better your odds are of getting opportunities to bid and win siding projects.
Most states will require that you obtain a contractors license before bidding on projects. To be eligible for a license, you’ll need to be 18 years of age or older, have the required skills and experience, pass a contractors examination and have a clean criminal record. Although some states have been loosening criminal record requirements to make it easier for those with a criminal record to obtain a license.
Another key component is being an expert in your field. You should know how to install all of the latest siding applications according to the manufacturer’s suggested installation methods. This is important because if a siding product is not installed correctly, it can void the warranty, which can cost your business valuable start-up money.
Tools of the Trade
Siding itself doesn’t require a lot of hand and power tools; however, it’s an environment where workplace safety is paramount. In order to safely perform and install siding, you will need a variety of equipment including:
- Extension ladders
- Pump jacks
- Aluminum planks
- Toe boards
- Safety nets
- Fall protection equipment
- Metal break
There’s no question the list above is a substantial investment, but it’s also an essential part of the siding business. Your next major investment will be your company vehicles and job trailer to haul your equipment. Image is everything in this business. Your company truck and job trailer should have your logo and phone number on them. This not only builds brand awareness, but it also portrays an image of professionalism. Also don’t forget to consider vinyl siding insulation as an option as well.
Responsibilities of Siding Contractors
Being the owner of a siding business comes with a lot of responsibilities. Your biggest responsibility will always be for the safety of your workforce. People die falling from a height of just six feet. Your workforce will always be subject to higher heights; therefore, your responsibility is to ensure staging and scaffolding is securely attached and constructed properly, fall protection training/education/usage is being implemented and every employee knows your emergency first aid procedures.
The next responsibly will be your legal obligations. Most states require building contractors to be licensed; therefore, you will need to check with your local government and obtain necessary licensing. You will also need to have a contractor’s insurance policy that includes a general liability policy and worker’s compensation package.
Depending on the type of business you want to run? You will need some type of accounting or payroll service for yourself and your employees such as infinitaccounting.com. If you plan on utilizing a payroll service, they will take care of all of the appropriate federal and state taxes as well as social security payments and unemployment premiums for each employee.
You also have the option of hiring your workers as a subcontractor and issuing them a 1099 tax form; however, they will need to meet the same licensing and insurance requirements as yourself.
How Contractors Can Find Siding Leads and Clients
Once your business is equipped with the proper siding equipment and your fleet and workforce looks the part? It’s time to hit the pavement and make your business known. Riding through residential subdivisions where new construction is occurring is the best place to start. Some of your best clients will be general contractors or homeowners who live in the neighborhood. Be sure to talk about certainteed vinyl siding as well.
Believe it or not, there’s a good chance that after a few initial conversations, you may find a contractor who’s tired of his current siding contractor and hire you on the spot. All it takes is one job to get the ball rolling. That’s why it’s so important to have your business signs planted in plain view because word-of-mouth is your best form of advertising. Also be sure to talk up features like insulated vinyl siding as great options.
People will take notice and even stop in to see you about their own siding project, and if you impress the general contractor? There’s a good chance you’ll be siding all of their projects without a bidding war.
Additionally, you can also find siding leads online by registering your siding business with reputable referral sites and placing your business cards on local advertising boards in public stores. Building a successful siding business will not happen overnight; however, if you treat every job like your own, the work will eventually come to you.
Consider the Benefits and Drawbacks of establishing a business
A general contractor is in charge of planning out every stage of a building project. Usually, the property owner hires them. You must be educated about the whole building process, from planning to completion. Also, you will be in responsible for selecting the necessary subcontractors to finish the job, so networking and establishing new contacts are essential.
You may take use of your knowledge and expertise by launching a general contractor business, which also gives you the freedom to pick the projects you want to work on and to establish your own hours. This freedom does, however, come with more duties. You will need to manage your workload, business, and reputation.
Make sure you fulfill these 5 essential criteria for success as a general contractor if you are thinking about going it alone.
- You possess the enthusiasm and ambition needed to launch a business.
- You are knowledgeable about the business and what it takes to be a general contractor.
- You appreciate keeping an eye on a lot of moving pieces and have solid managerial expertise or an equal skill set.
- You already have the tools necessary to run your company, or you know how to generate the funds required to buy high-quality equipment.
- You are completely aware of the dangers involved in beginning a business.
Starting a general contracting firm is the best option for you if you responded positively to the aforementioned questions.
Draft a Business Plan
Developing a strong business plan should be one of your first priorities when establishing any type of enterprise.
A well-written business plan can help you better grasp your long-term objectives and serve as a proof of concept for the future success of your firm. This is true for general contractor businesses as well.
Do not make the error that many individuals do, who completely miss this important step! The procedure for writing your business strategy is simple. Each step of your business journey is outlined in this roadmap for your company.
If you plan to apply for any small business loans, be extra thorough. Before granting you a loan or providing you with funds for the firm, the majority of financial institutions and potential investors will need to analyze your business plan.
Get Licensed, Bonded, and Insured
By making sure you have the necessary licenses and permits, bonds, and insurance to run your business lawfully, you can protect yourself, your customers, and your company.
Licenses Needed to Operate As A General Contractor
Each state has its own licensing requirements for general contractors in addition to regular business licenses. Failure to comply with such standards when performing work in any state might be disastrous for your company. Remember that you’ll need a license in any state where you want to do business. Hence, if you intend to work beyond state boundaries, make sure you first obtain the necessary permits.
There are more than 40 distinct categories of contractors, such as general builders, general engineers, and specialist contractors. Many instances that may be considered specialty contractors include:
- Contractors for insulation and acoustics
- Contractor for concrete
- Ceiling Contractor
- Fire Protection Service Providers
- Contractors for flooring and floor covering
- Contractors for building relocation and demolition
- Plumbing professionals
- Contractors for paving and earthwork
- Fencing professionals
- Contractors for masonry
- Roofing professionals
- Contractor for structural steel
From discipline to discipline, the procedure for obtaining your contractor’s license may differ, but generally speaking, you can anticipate to:
- To demonstrate your proficiency in particular contracting disciplines, take a written test.
- Show that you have the resources to launch your own firm or the potential to obtain investment.
- Reference letters should be provided from your bank, prior jobs, former clients, and coworkers.
- Show that you have experience working on the job, even if it just includes apprenticeships.
Typically, in order to function, every general contractor firm needs construction bonds. Surety bonds are meant to safeguard your client in the event that you fail to uphold your end of the bargain. Surety bonds, like other types of insurance, are issued by a third party and need that you follow state laws, which change from state to state. If you need assistance getting these bonds, look into the Small Business Association’s Surety Bond Program.
You will almost always be obliged to have some form of coverage, regardless of the quantity of insurance coverage your business needs. You could also require property insurance, insurance for corporate cars, and general liability insurance.
You will also require workers’ compensation, state disability insurance, and unemployment insurance if you want to hire your own staff members for their protection.
Choose a company name
A crucial step in launching any firm is picking a name for it. Prospective customers should be able to quickly read and recall the name of your company and be aware of the areas in which it excels. Choose a respectable name for your business that accurately describes the services you want to give the market and stay away from titles that can leave customers wondering what you actually offer.
Open a Business Bank Account
Before opening a company bank account, wait to take your first client payment and deposit it in your personal account. The liability protection obtained by creating a legal corporation is secured by maintaining your personal and corporate money apart.
You can do the following when you open a bank account for your company:
1. Receive and process payments under the company’s name. A client could think it is unprofessional if you bill and invoice clients using a personal account rather than a company one. You will probably have to pay quite a few subcontractors that you’ll need to engage to do your work as well.
You may take cheques and money under the company name by opening a bank account for your business. This exudes a great degree of professionalism and authority. Also, it makes it simpler to evaluate gains and losses by separating your funds.
2. Defend your own assets. The distinction between you and your business becomes hazier when you merge your personal and corporate assets, particularly those that are financial in nature. In the case of a lawsuit involving your firm, this absence of a clearly defined division puts your house, vehicle, or other important items in danger.
By doing this, the corporate curtain is being penetrated. Separating your finances also lowers your risk of being audited and simplifies tax preparation.
3. Get credit. Creating a credit history for your company might be beneficial when you’re looking for outside funding or need to show that your company has purchasing power. For general contractors who will have to make significant and costly equipment acquisitions, this is particularly crucial.
Before you can open a business account with the majority of financial institutions, you will often need to get an employment identification number (EIN) for your company. The IRS issues nine-digit numbers known as EINs, often known as tax IDs. For tax purposes, it is used to uniquely identify your company. Consider your company’s EIN as a somewhat less sensitive version of your social security number (SSN).
If you want to hire people, the IRS also requires that you get an EIN. An EIN is a need if you intend to grow your consulting company in the future and is rather simple to obtain. You may get assistance from MyCorporation with the documentation required to apply for an EIN for your general contractor firm. It simply takes a few minutes to finish the basic process.
Work with Subcontractors
It is customary for subcontractors to perform the majority of the work on your projects. Your general contractor firm depends on you being able to hire the proper personnel with the abilities and reputation to get the job done. After all, the final result will be relied upon by your clients, as well as those of your subcontractors.
You must be aware of the tax repercussions and legal requirements of recruiting and paying your staff, regardless of whether you decide to hire your own employees, work with independent contractors, or outsource work to other subcontractors.
Making the distinction between workers and independent contractors may have an effect on your bottom line since it influences how you withhold taxes and steer clear of expensive legal repercussions. When employing your first employee, become familiar with the distinctions.
Independent contractors run their own businesses and charge clients directly for services rendered. Legally speaking, independent contractors may occasionally meet the definition of employees. If it is later decided that your contractor qualifies as an employee under the law, you can be required to make back taxes and penalty payments, offer benefits and recoup earnings.